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Final week of the Main Run

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The main run of the 2016 Legislative Session is set to end on Friday, March 11. Veto Day will be held on Tuesday, March 29. The biggest issue remaining this week is to put the finishing touches on the State’s $4 billion budget for the fiscal year which begins July 1 and runs through June 30, 2017.

The legislature will also spend time this final week working on the new education funding formula, including setting a target average teacher salary of $48,500 and a target student-teacher ratio based on school size. The proposal contains many moving parts, and I expect future legislatures will be making tweaks to the formula in the coming years. The current funding formula was adjusted many times since it was adopted in 1995, and I expect this formula will be no different.

Areas of discussion include setting the right student-teacher ratio and the proper use of capital outlay funds. The original bill was introduced with a ratio of 12.5 to one; it was amended to a ratio of 12 to one; however, there are discussions about adjusting the ratio to some number in between those two. There are also discussions about changing the amount of capital outlay funds that can be used for general fund purposes. In addition, there continues to be work on ways to make sure the accountability piece of the legislation is correctly worded, to ensure the extra money from the sales tax increase is used to increase teacher salaries.

Last week the House failed to override the Governor’s veto of HB1108, dealing with school policies regarding transgender students. In his veto message, the Governor argued in favor of local control stating that schools districts can and have made necessary restroom and locker room accommodations that serve the best interests of all students. The prime sponsor of the measure recognized that the measure did not have the 2/3 majority support in the Senate needed to override the veto, and thus asked that the House uphold the veto. He said in his floor speech that he would like to come back next year with a different bill.

On Monday of this week, the House gave approval to SB2 to change how the alcohol beverage tax is allocated. The tax raises about $15 million per year. Of that amount, the State gets 75% and cities get 25%. The counties get none of the revenue from that tax; however, counties bear the brunt of expenses from alcohol-related crimes. The bill passed the Senate 28-5 and passed the House 69-0. It will mean approximately $3.75 million additional money for counties to meet law enforcement costs. The bill to increase fees that counties can charge for various services, HB1005, is still on a holding pattern in the Senate because of questions about the fees sheriffs can charge for civil process.

SB 159 was brought in as a way to encourage school choice. It would redirect insurance company tax credits to scholarships for private schools. A similar proposal failed last year because of concerns about the constitutionality of the measure. According to Article 8, section 16 of the South Dakota Constitution, no appropriation of lands money, or other property or credits may ever be made to aid any sectarian school. The Institute of Justice headquartered in Arlington, Virginia, claims that the bill is “entirely constitutional” and offered to defend the program if it is ever challenged. The bill was killed in the House Appropriations committee, but was recalled to the House floor by a motion where a bill is “smoked out” of committee.